If you want a job done properly – hire less lawyers?

6 May 2013

Most in-house functions are missing out on one of the greatest opportunities to improve the value of their functions – non-lawyers. Utilising the skills of paralegals, legal operations managers, or other non-qualified staff, can drive substantial efficiencies, improve legal team performance, morale and create a function more likely to meet business expectations.

...does it make sense for a highly trained, highly paid, lawyer to be reviewing a licensing agreement for a vending machine?

Of course it’s no great secret that, historically, a large chunk of the in-house legal function’s mandate is focused on lower-risk and routine work. So does it make sense for a highly trained, highly paid, lawyer to be reviewing a licensing agreement for a vending machine? Certainly few businesses have gone under because of the indemnity in the coke machine contract.

While this question is clearly rhetorical and slightly farcical, a huge amount of lawyer hours are spent every year undertaking relatively low-risk tasks. Beyond being an inefficient use of lawyers’ scarce time, it is ineffective from a purely economic perspective. Take the simple example below. In one, the lawyer reviews an agreement from end-to-end, in the latter the lawyer only reviews those elements requiring specific legal advice.

Lawyer

Annual Salary

$150,000

Approx. Annual Working Hours (8 x 5 x 48)

1,920

Time to Review Agreement

2 hours

Cost to review Agreement

$156

But what about the risk to the company I hear you ask.

Non-Lawyer

Lawyer

Annual Salary

$60,000

$150,000

Approx. Annual Working Hours (8 x 5 x 48)

1,920

1,920

Time to Review Agreement

1.5 hours

30 mins

Cost to review Agreement

$46.50

$39

TOTAL COST

$85.50

As this simple example illustrates, the cost is halved. Yet this is the type of the iceberg, the examples, does not highlight the benefit of getting non-lawyers to perform the myriad of administrative tasks in-house lawyers routinely perform. Clearly there is a tremendous opportunity for legal teams to segment tasks according to the inherent risk and expertise required, then to leverage the capabilities of non-legal staff (see diagram of example task segmentation, below).

But what about the risk to the company I hear you ask.

It is true that there are a large number of tasks, which would be inappropriate to delegate to a non-lawyer.

However, we estimate that approximately 40% of the work that passes through legal departments can be managed by non-lawyers – with varying degrees of lawyer oversight. Further, by a simple reallocation of lawyer time to higher order tasks, there is a compelling argument that doing this will actually reduce residual risk.

So next time your department is reviewing it’s resourcing, rather than defaulting to the ‘if you want a job done properly, hire a lawyer’ instinct, consider the benefits of employing non-legal staff to meet the increasing business’ demands.